Sunday, February 28, 2021

Do you know your Medicare number offhand? Try memorizing this!



Being asked for a new piece of information by Reception when you are waiting in line for a colonoscopy screening is no fun – especially when this information is not listed anywhere as required for check-in, and you’ve never been asked for it before.  In my case, it put me in the role of problem-solver, not my job as patient.  Yet another example of assumptions made by medical centers but not communicated to the patient—especially in time to do anything about them. 

The latest Medicare number is an 11-digit alphanumeric randomly generated “Medicare Beneficiary Identifier” (MBI), introduced to prevent fraud and identity theft and protect patient information.  It went into effect in January 2020.  It replaces the familiar Social Security number.  Normally it is part of any insurance company record, whose own member number substitutes for the Medicare card.

Like Canada’s postal code (as well as the British, Irish, and Dutch), but even longer than the longest such postal code in the world, Iran’s 10-digit format, it is difficult to read, type, or memorize.  This is, of course, the better to thwart thieves intent on ID theft by making it impossible to guess, and by removing any links to Social Security.  But the same goes for the legitimate code owner: in this case, me.  Here’s the format:  1AA1A11AA11, where A is a letter and 1 is a digit. 

This might be expressed as 5DH7D32RS87, for instance (not my personal MBI, BTW).  This format risks mistaking certain letters for numbers (like O and l for zero and one), and the Q looks a lot like zero while G looks like a 6 and B can appear as 8.  When you type out these mixed codes, your brain is forced to toggle between two systems, numeric and alphabetic, which results in mental stress.  It also requires the added motion of hitting and releasing the Caps key again and again.

Recently I had a close encounter with this piece of information I didn’t know I needed, and unlike my SS number, have never tried to memorize.  I arrived at Reception at 8:30am for my screening, for which I had spent the past week prepping with diet and clearing-out medication—not a process anyone ever looks forward to repeating.  The screening itself is easy; the prep is where all the work is.  Just the thought of wasting and then repeating this effort is highly stressful.

Everything went fine until I was asked for my Medicare number.  I never carry my Medicare card, and I knew the clinic had all my insurance numbers from six months ago.  The patient instructions specify not bringing any valuables, so I left them home.  Here I was now thinking that all my diet and prep steps were about to be derailed – an upsetting potential.  According to the reception staff, Medicare is insisting more and more often on the number, and the practice must enter it in order to admit the patient.  Of course, had I known I needed it, I would have made a point to bring it with me.  Apparently there is no advance notice – just a demand by the check-in system that works by random chance.  And at a point when there is really nothing the patient can do about it. 

This missing code instantly created a gap that had to be bridged, one that threatened to block my care.   As the staff began running around trying to figure out this sudden new demand—as if this were the first time they had ever seen it--I began thinking hard: how could I as patient solve this for Jefferson GI?  And a tandem thought: Why was this suddenly the patient’s job?  This is analogous to standing in line to board your plane, only to be told you need a second form of ID—and all you have to show is your driver’s license.

I suggested calling Cigna, my Medicare Advantage insurance, which must link to Medicare.  There was also Medicare itself; had they tried here?  How about my primary care doctor, also in Jefferson’s system?  Maybe Billing would have this information.  It turns out, after 15 or more minutes and a steady line of patients building out behind me, that’s where the department found it.  I was at last admitted, but only after a hair-raising episode of fear, uncertainty, and doubt.  Patient Assistance even suggested that if these ideas failed, I could always call my husband at home and have him locate it for me in my home office.  However, he had just escorted me to the building and wouldn’t yet be there to wade through my medical files.  Now my household was getting involved, not a direction I wanted to go. (Those living alone are on their own here.)

I did point out to Patient Assistance that this Medicare card requirement was a bottleneck that needed to be handled.  Will they be able to solve this?  Isn’t the reception staff tired by now of trying out fixes?  Don’t they need a solution that works?  Or is the patient going to be the go-to party to solve problems that belong to the health system?  I’ll find out in another year, when my return visit will schedule. 

Update:  On emailing Billing, I received the following reply from the staff: 

The front desk is required to ask all patients that have Medicare Advantage plans for their original Medicare ID# [the MBI].  The system prompts them to ask.  I’ve sent an inquiry to the registration team at Jefferson to ask them why this is such an issue. It seems to have become an “ask” after we had a recent upgrade.  I will let you know what they tell me when they respond to me next week.

Is this new prompt built into the software upgrade?  Reception tells me they see it randomly, not routinely.  In any case, upgrades need to be examined for any new demands on the users on both sides of the counter.  And then coordinated with instructions to patients before, not after, the admission process.  This clearly was not carried out, meaning the patient could end up without service.  At the least, it produces some hard emotions and memories, and delayed service that cascades back down the waiting line.    


Tuesday, February 2, 2021

Mission + Vision: Just Do It


Mission and Vision started as two separate exercises by senior managers to identify what their business is doing and what it ultimately wants to achieve.  These two statements (along with the Value Proposition for the customer outcome) are often now combined to express both being and becoming.  The main idea is to create a clear focus for decisions and opportunities in the service of a clearly stated direction and purpose. 

Steve Jobs said this about his company’s motivational value: “If you are working on something exciting that you really care about, you don’t have to be pushed.  The vision pulls you.”   General Eisenhower said much the same thing decades before about the easiest way to get a string to move. "Pull the string and it will follow wherever you wish. Push it and it will go nowhere at all."

A consultant to the US Army asked what their mission statement was.  "We don’t have mission statements,” the officer in charge replied. “We have missions.”  Organizations like the military are social enterprises, with public-good goals that citizens generally understand from the outset.  Productivity consultant David Allen’s company name tells what he does and what he wants for his clients: “Getting Things Done.”  The Moonshot Factory, the skunk works of Alphabet, puts their mission this way:  The goal is to “create radical new technologies to solve some of the world’s hardest problems.”  The desired achievement?  “10x impact on the world’s most intractable problems, not just 10% improvement.” 

Mission / Vision has a double role.  It works both to clarify purpose within the company for making decisions and to know how those decisions align with the company’s direction. It informs the self-image of the brand idea or company core ideal.  For external purposes, a capsule statement like Nike’s 1988 “Just Do It” slogan inspires confidence in the brand and serves as a legend that carries the brand’s dedication to sportsmanship and health.  Inspiring achievement of greatness, it still doesn’t reveal exactly how Nike expects this to happen.  (The story goes that the phrase echoed convicted serial killer Gary Gilmore’s last words to his firing squad, “Let’s do it.”)

For another example, how about Microsoft’s revised mission of 2014 “To empower every person and organization on the planet to achieve more.”  The original 1992 Gates and Allen purpose as a corporation was to “put a computer on every desk and in every home.” Because as soon as there was a computer on every desk (and Starbucks table), the mission had to be expanded and updated.  The Fortune counterpart is “Making business better.”  These are sweeping mandates, like IBM’s signature “Think.”  Are they too broad?  “Making the world better” and “Making a difference” are laudable aims.  But how, why, and with what results, and for whom?

I have always been fond of the elevator pitch, a telegraphically cogent mission statement made famous by the TV Western series “Have Gun, Will Travel.”  That’s the message.  The business card adds some needed information:  the principal’s name and contact information: “Wire Paladin, San Francisco.”  However, this explains HOW Paladin operates, but not what he does, which is far more important.  He settles disputes, often complicated ones, as a talented negotiator with the gift of understanding the real issues behind his clients’ conflicts.  He is often, however, mistaken for a simple gunfighter or assassin.   

Further problems emerge when we dig deeper, for example, with Ed Catmull, co-founder of Pixar and President of Disney animation studios.  Here is what he said about Disney animation: “The real goal of what we’re doing is to have a positive impact on the world.”  Or the mission of the East-West Center (where I did my graduate work at the University of Hawaii): “The East-West Center promotes better relations and understanding among the people and nations of the US, Asia, and the Pacific through cooperative study, research, and dialogue [at plenty of conferences].”  What question does this beg?  It’s a lofty goal, but how will the results be measured, and will they tell you if you are succeeding in the long view or just operating year to year?  What is “positive impact,” and “better relations and understanding”?  These cases should be red-marked by any business school. 

The Starbucks mission gets closer to the “How” question in their mandate “To inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time.”

Corporate consultants Bain & Co.’s website presents a view of mission and vision that very few businesses seem to have enacted (April 2, 2018, home site).  “Ensure objectives are measurable, approach is actionable, and the vision achievable.”  That directive seems to live far from the common practice of even the biggest and most successful companies in drawing up their missions and visions. What is missing is accountability. 

How about revising a couple of missions: TED Talks “To spread ideas.”  Adding “One expert talk at a time” tells how this happens.  American Express: “We work hard every day to make AmEx the world’s most respected service brand.”  This can be made more effective by just claiming the outcome as “World’s most respected service brand.”  It’s good that AmEx works hard—but we assumed that.  And now back to Nike: “Bring inspiration and innovation to every athlete in the world.  If you have a body, you are an athlete.”  Is this believable?  Or just a form of flattery?  How about “Inspiring innovation for the athlete in everyone.”  (You’re welcome.) 

Like the Army, perhaps business needs more missions and fewer statements.

Here is a mission statement I made up for Cultural Studies & Analysis, my think tank that studies culture: “Explore the universe of culture to discover how and why people around the world think, believe, and act, in order to benefit both business and education.”  How will I do this?  By making my Vision into an achievable objective: “Work on interesting projects, with interesting people, and go interesting places [both mental and geographical].”  Both statements can be measured by project numbers, industries studied, and problems framed in ways our clients had not seen before, with outcomes to clarify human motivation for problem solving, creativity, and innovation. 

Sunday, January 10, 2021

Black Swans: What you don’t know CAN hurt you

There may be a piece of information consumers need that they don’t know exists - or even suspect is out there.  Black Swans suddenly change the way you see and assess situations, the “leverage multiplier” needed to redefine problems, revealing new sources for solutions.

“The unspoken breakthrough dynamics of a negotiation….  Factors you didn’t know about and were not accounting for.…the leverage multiplier.”

-- Chris Voss, Never Split the Difference (2016)

Black Swan events have become infamous factors in the global culture now emerging, the wider culture we all inhabit.  The pandemic of the past year 2020 is a leading example.  But the term is not a new one.* Once people thought that all swans were white, as those were the only ones they had ever seen. Their worldview changed when the first black swan in nature was actually sighted in Western Australia by the Dutch explorer Willem de Vlamingh in 1697.  From that moment of discovery, the swan of a different color at once became a metaphor for newfound potential.   In 17th-century London the term was used to denote an unforeseeable event, one with wide and usually unintended consequences. 

While the cues and markers might be around and even visible, until there is a verified sighting – real proof of existence that people can agree on—there is no mental file folder that can allow the mind to consider and build on an idea.  An example is the current Covid world crisis that, while predicted in theory, was nevertheless not seen or prepared for. Impossible ideas are relegated to fantasy, making it impossible to operate within the realm of creativity and innovation as possibilities with real potential.  Other examples of “impossible” inventions?  1) the theme park and 2) Assisted Living, both thriving institutions of consumer entertainment and senior living.

Founder of the Black Swan Group Chris Voss navigates corporations through the complex problem-solving process of negotiation, the key skill in multi-party actions. Voss has assembled a manual of problem-solving approaches based on his background as an FBI hostage negotiator.  His experience models the tactical uses of emotional intelligence to avoid compromise, ending with a resolution in the client’s favor.  

It is easy to imagine developing training along the lines suggested in the Voss book outside the more left-brained Getting to Yes approach, aimed at discovering the Black Swans in the equation to fill in vital information either missing or disregarded.  The simple recognition of these factors can result in summary resolution of problems that so far have been stubbornly resistant to a mutually satisfying solution.   

Part of the success outcome, of course, depends on the wits and experience of the negotiator to spot that piece of information, or its space in a familiar pattern, that will signal how the original problem got its start and kept on rolling.  As well as how to untangle and reorganize which facts and events are vital in order to redefine the problem and multiply the leverage to win.  

On the consumer front, these could be: A glitch in computer programming no one has identified or fixed: the Y2K crisis, the widespread EPIC (“disaster”) software failures in healthcare, or the JPMorgan Chase bank overdraft charges of $34 up to three times per day. These each took many months to recognize and uncover.  Or a company acquisition that blocks customer repairs and refunds; an offer to reduce a loan rate has been retired, but thousands of customers are still eligible under its terms—and the new service reps don’t know it even existed.  Most typically, the company’s own needs, rules, and liabilities are driving the negotiation, but the service reps are talking as if they have a “customer-first” ethic, confusing every interaction.  The credit card company, the health insurance company, the hospital, the doctor, the physician practice group, and Medicare each have different policies and practices, and they are not in alignment, creating chaos for the patient and family.  No one has an aerial view of the overall gridlock—the EPIC program failures are still on a roll as of this month. 

Finding solutions requires relocating the problem connection between the customer’s problem and the company’s problem.  It takes a wider vista to find the missing piece or pattern. 

Taken to a panoramic scale, in a recent Fortune issue ((Aug/Sept 2020), editor Clifton Leaf writes about the value of cross-cultural commerce in itself. Cross-border trade now is nearly two-thirds of world economic output; long before this, it made America the first world superpower. This emerging world is opening new markets for ideas as the key attribute of the Global 500, the planet’s top firms.  “You get to dip into an entire new world of knowledge and innovation activity that has been closed to you before,” says Fabian Trottner, economist at UC San Diego who explores the export / innovation connection.  This wider horizon can yield unsuspected swans in the form of new information leading to new frames of reference.  Just what is called for to solve intractable problems ranging from consumer issues to international crises. 


*The Black Swan: The Impact of the Highly Improbable (NY: Random House, 2007) by Nassim Nicholas Taleb is the popular source for this concept.

Sunday, December 20, 2020

Negotiating for Yourself: The experts advise against it


 Part 1   

Acting as your own advocate - negotiating for yourself - is a difficult and often impossible role to play.  For the consumer, companies have all the vital information on their side, which is quickly evident in high-stakes deals like real estate and time-share, less evident (but equally clear) in lower-stakes contracts like cell-phone plans.  A national start-up navigator service for consumer issues raises this question as the core of their business model.  Our cultural research for them includes the following intelligence. 

For example, this month in Orlando I was subjected to a royal case of don’t negotiate your own deal – an upselling conference at my Sheraton (now owned by Marriott) timeshare resort, where I’m an owner.  Trying to master the fast-flying acronyms and case coding numbers was difficult enough.  Pressure from a hard-sell confrontational agent makes it impossible for even long-term owners to know what they are buying.  Even more difficult is determining the true cost to the family budget over a long-term future of juggling annual dues, reservation weeks, location options, and point credits within the system.  Things got heated when the agent did her best to make my existing title purchase sound as if it had lost most of its value, a common upselling gambit. 

I ended up walking out the office door and reporting the encounter to the sales manager, who apologized and promised me some points for pain and suffering.  But this hard sell experience left a bad taste, making me question why I had to put up with such grief just for some basic information about the resort’s latest deal.  I am sure other members signed contracts for thousands of dollars that won’t justify the expense.

This failed sales appointment wasted my time and energy and left me (I thought) with no option but to walk away, which I did.  I felt incompetent to bargain – which, up against the sales pro, I was. 

This would have been an ideal time to entrust negotiations to my own personal agent—if I had one.  A consumer-issues navigation team would make an ideal choice in this situation, parallel to a real estate buyer’s (rather than seller’s) agent.  The buyer’s agent works for you, not the homeowner, and has only the consumer’s interests in mind (working on salary, not commission).  This assures the buyer of unbiased advice, separated from profit motive. 

Consumers rely on companies for policies, services, and contracts they already own but don’t understand and can’t navigate.  They have a more difficult, ongoing problem: How to restore use and prevent losses they can’t afford to absorb.  If the issue is electricity, the power loss extends from appliances to alarm systems, including security, and “your computer, your life.”  The refrigerator goes lame—every item of perishable food is instantly at risk.  Your car gets towed and your entire transport system goes down—including work and school commute.  These problems can’t be fixed on your own.  They are built into larger systems that require negotiation savvy the average consumer can’t hope to acquire in hours, days, or weeks. Even a lifetime.

So now you are forced to advocate for yourself as your own negotiator, a position world-class experts like Kenichi Ohmae, in the classic The Mind of the Strategist (1982), advises something we don’t expect to hear: Giving up.  In his expert view, by using strategic insight, consumers operate better and more effectively by refusing to even attempt difficult or complicated negotiations with consumer services.  Instead they need to hire out to seasoned experts who navigate deep, dangerous, and turbulent waters on the customer’s behalf (p. 276). 

Ohmae urges the consumer to always “Question the prevailing assumptions of an industry” – that companies can and will take care of the needs of their customers in the face of promoting their own agenda, especially when the customer’s interests conflict with the company’s.  It is time to devise ways to take up the consumer cause as buyers’ agents as negotiators on the consumer’s behalf, cancelling the usual need to wonder where the agent’s interests and intentions actually lie.

Part 2  

Negotiation is a situation of understanding your own aims and position, and those of your adversary.  But the best person to advocate for your goals is not yourself, but a third-party guide knowledgeable about the territory, the ground rules, and your goals.  Not as the principal, but able to work objectively and without the emotional investment you bring to the table.

“Today’s world is one of acceleration and change, so even the future is holding its breath.  In this climate, the single most important skill is the ability to negotiate.” 

– Herb Cohen, Negotiate This! By Caring, but not T-H-A-T much (2003)

Whenever you are forced to advocate for yourself as your own negotiator, you find yourself in the position world-class expert Herb Cohen advises against.  This is the same warning given by Kenichi Ohmae in his work on the strategic mind for competitive advantage.  Negotiation is fundamental to all social relations, but has a special role in the strategy of being a consumer with the issues inevitably involved with that role.

In Negotiate This! the follow-up manual on negotiating since How to Negotiate Anything in 1980, Herb Cohen outlines the situations and players across many negotiating scenarios based on his broad experience as negotiator and a background in history, law, and international relations.  His aim is to discover the dynamics and rules of negotiation as a way to resolve the divergent desires and interests of two or more parties.  Affecting the attitude and behavior of the other players goes just part of the way toward achieving one’s own ends. 

It is actually a mentality, a way of approaching this process, that Cohen’s professional experience reveals.  His case studies show how changes in your own thinking and action can be the leverage that transforms the attitude and approach of the other side.  The process is dynamic, complex, and learnable, and results in creative new outcomes neither side could initially envision.  Examples from the author’s portfolio include the seizure of the Japanese embassy in Lima in 1966, The Iranian hostage crisis of 1979, The Camp David Summit of 2000, and the worldwide terrorism epidemic, along with strikes, union negotiations, and class action suits. 

One of Cohen’s frequent lessons is that negotiating for yourself is often not effective or even a good idea.  As in his subtitle, the worst person to negotiate is yourself.  Why is this?  First, we care too much about the outcome and our position, which limits and distorts the perspective needed to understand our true position—and underscores the “me versus them” conflict character of the engagement.  It prevents seeing clearly what the field of options could be as well as identify the best and worst ones, as well as those that work best for both parties and so are more likely to get agreement.  As Cohen puts it, “When I negotiate on behalf of myself, it’s not a game anymore, it’s my life, my legacy.  So the result is often plainly pathetic” (p. 4).

Second, we give ourselves too much authority to accept or reject any terms we might be offered—without being confident that we know what those should look like.  This can be answered by limiting that authority by saying, “That sounds good to me but I’ll have to check with my board…or substitute the word banker, attorney, adviser, boss, or even spouse” (p. 54).  What you are looking to leverage is the deep knowledge of the industry expert adviser as the third party.  The goal is to find ways to hire out this level of authority for better, faster results than you yourself can achieve. 

To illustrate the wisdom of this stance, Cohen relates the case of Moses and Aaron freeing thousands of Jews from slavery in ancient Egypt in the Old Testament book of Exodus, calling this “the first hostage negotiation in the annals of history.”  Moses’ brother Aaron was delegated by the Lord to be the spokesman, rather than Moses, in bargaining with Pharaoh for the release of the Hebrews from bondage.  Aaron, more articulate than Moses and his stutter, was able to achieve the release because he stayed out of the direct deal-making, where the principal was emotionally invested and cared too much about the outcome. 

As Cohen put it in his first book, “Negotiation is a field of knowledge and endeavor that focuses on gaining the favor of people from whom we want things. It's as simple as that….The ‘winners’ seem to be people who not only are competent, but also have the ability to negotiate their way to get what they want.”





Sunday, November 8, 2020

Problem Types – Clear to Chaotic

Cynefin (the Welsh word for habitat) is a conceptual framework developed out of IBM during the early 2000s and has been labelled a “sense-making device.”  This framework has continued to evolve through the work of David J. Snowden and colleagues of the Cynefin Centre for Organizational Complexity.

 “In the face of greater complexity today, however, intuition, intellect, and charisma are no longer enough.”  -  - David J. Snowden, HBR, Nov. 2007

Snowden’s typology of the Four Cs of problems – Clear, Complicated, Complex, and Chaotic -- is intended to focus on disorder, complexity, and uncertainty in the assumptions that can be made about certainty, stability, and confidence in accepted best practices to frame the problem and arrive at solutions. 

Not all problems are created equal.  Any problem-solving venture should begin with the question “What type of challenge are we facing here?” In order to determine the level of difficulty—as well as how it can be framed for a solution—a problem typology defines the territory of the problem—smooth, rough, varied, or steep—as a way to force a kind of profiling to differentiate it from others.  

As a consultant to IBM Global Services in 1999, Snowden developed a typology of problems whose purpose was to impose a new perspective on problem-solving: one derived from complexity science.  Knowing that context drives problem perspective for decision-making, Snowden’s “Cynefin” framework (named for “habitat” in Welsh – don’t worry, this is noncritical) sets up a way to formulate problems of varying difficulty and urgency on a scale that points to the different needs for action and expertise among four types – including an outlier, “Disorder,” that informs each of them with a slightly different “unclear” “jagged” or “tangled” edge.


Clear Problems (also known as Simple or Obvious)- these contain no unknowns. You’ve seen them or similar problems frequently, so you understand how they are constructed. There are obvious answers and easy fixes available.

Domain: Best Practice.  A simple answer might be in calling your State Rep to take care of an insurance problem you can’t figure out your way around, under the rule, “If unsure, delegate to an authority with clout.” Request an extension if your taxes aren’t ready.  Ask your credit card to reset your credit limit.  This is the simple “fill in the blank with X” and you have the missing information—the information you already know you need. 

 Complicated problems - The cause of the problem is not obvious. You need to identify the key parts of the equation but you already understand the underlying system, which has multiple parts and a clear sequence. You need an expert solution to address this problem. 

Domain: Experts. Auto mechanic, health specialist, CPA, roofer.  Call your appliance brand to get a fix on the phone or internet.  There is a code or sequence you don’t understand. It must be clarified by a knowledgeable expert.  You are calling the wrong office for the right reason; find the system expert who knows that person or number is obsolete, then get the right one.  Alexa won’t connect to Amazon radio. You don’t know why. Get an expert fix simply by asking her, “How do I reset you?”  Unplug and replug.  Fix, case closed. 

 Complex Problems – Cause is not clear or there are multiple causes or relationships that are not apparent. They form a problem chain or linked system that’s not easy to separate in order to see how they are related, or find the gaps. Another job requiring expert solutions or, failing that, some form of elegant tweaking—involving analysis from outside the system. 

Domain: Emergence.  A multi-system problem, like medical procedures on one side and insurance on the other, yields conflicting advice from different entities (appeal/don’t appeal).  Multi-party, multi-issue spanning 2, 3, 4 or more systems.  Define the problem—search for an entry point to clarify that definition, then move forward while looking to see where the solution links might be. 

 Chaotic Problems – These are crises, requiring immediate action. Change one dynamic parameter and the crisis might be resolved in a ripple effect. The ideal goal is to first tweak them back to the Complex category, stabilize them, iterate the response, and define the new environment.

Domain: Rapid Response.  This is the domain of the ambulance, the fire brigade, security, police, Red Cross, the Marines.  Global response to the Covid pandemic works like this – but in slow motion, as social distancing is tried out worldwide on different schedules, then recalibrated when cases spike.  

Saturday, October 10, 2020

Change Management on a Cultural Scale

Some thoughts on Change –  From an interview by Peter de Jager of Technobility:

Cultural Studies & Analysis principals Margaret King and Jamie O’Boyle field his expert questions on change—as a cultural concept.  Hear the entire September 2020 power-point interview at!AndfYpyVsX3z2QpXKH9h9v9MHoWJ.  Here is a summary of the high points.

1.   What is CS&A, and what does it do? – Our research group tracks and studies group choices over time to identify consistent patterns of behavior that reveal how people think, make decisions, and act--to find value in products, services, concepts, and ideas.

 2.    Why study behavior rather than just ask people what they want?  - Because people cannot tell you what they want with any degree of accuracy, but those same people recognize what they want when they see it with 100% accuracy.  So what people tell you they want is unverified testimony. It’s basically a guess. If something better comes along, then everything changes. But since they don’t know that something better exists until they see it, they can’t tell you about it in advance. The buy decisions are made below our conscious horizon. Then our brain invents a story to validate that decision. So what people habitually do becomes reliable evidence of underlying beliefs that drive our decisions. Without examining the evidence of consistent patterns of behavior to compare to the verbal testimony, you are working without the critical information to make informed strategy, planning, and tactical decisions.

3.      You say “what people habitually do,” but what happens when the context or the environment changes?  What happens when circumstances change? Don’t people intuitively resist change?  - People change all the time – we grow and age, for instance, and our wants and needs change with that process. What we have problems with are sudden changes, and even more so, changes that are forced upon us. That’s why change management is so important. Change managers are like guides who lead expeditions through unknown territory. They may never have been in that particular wilderness before, but they know how to survive in the wilderness in principle – they know what a pitfall looks like.  They know what a safe haven looks like. They know what resources like water look like. It may be a rough slog, but they’ll get you through it.

4.     What is change in terms of culture?  - It’s the main mechanism by which culture occurs, by adjusting to changed circumstances, evolving alongside new needs, altering our reality by means of new visions of the present and future.   Cultural change is a constant, either fast or slow, and in fact is what creates culture.  That makes it hard to study; it doesn’t stand still for anyone.

 5.  What does that say about human activity at any one time?  - We spend a lot of our time and attention on “adaptation energy,“ adapting everything we do to changing conditions, even micro-changes like who’s at home and who’s not, travel, study, socialization.  Where we put our attention is dictated quite a lot by what is going to happen tonight, tomorrow, next week, next year, and so on. We don’t do nearly as much long-term thinking because things might change, and (our attitude says) then all that long-term planning will be for nothing. 

 6.    What do you do with this kind of knowledge?  - Understand what the human cultural motivators are that are driving our collective thinking, values, and behaviors.  We’re in a forced state of change now, which makes it harder to predict or plan what we’re doing – no one even knows six months out how the pandemic will shake out in all fields of endeavor beyond health – the economy, foreign relations, education, entertainment, work, and recreation.  Nothing is going to return to pre-COVID normal.

 7.    Can you give an example of this ongoing crisis mode, our brains on sudden and anxious change? – The question is; how do we get through this event – working with depression, anxiety, apprehension, uncertainty.  Especially uncertainty.  Our brains don’t like it.  We can’t plan.  It’s mental and emotional limbo.  Without a time frame we can count on, our accustomed sense of what’s real suffers week after week as the timeline stretches out indefinitely.  We can deal with continuous, steady change.  We can’t deal well with change that is sudden, discontinuous, unconnected and unexpected.  Uncertainty sounds like the main problem we have with change.  – It is, because if we can’t chart forward movement, therefore how do we identify opportunity in what’s going on now to survive and thrive?  How will my social resources change?  These are “CIS” questions – “Can I Still--”  (do X)?  What we need are intelligible ways of connecting our past and present to our sense of what kind of future we need to start living--now. 

8.    What are we able to be certain of, then?  - Lots of things, how we develop from child to adult – we see this as progress which is welcome, expected, and planned-for.  It’s evolution.  Even aging has a gradual, expected character – which we know how to deal with because it is so familiar and incremental.  We are all adapting to our life stages --- except for middle-age crisis, which does throw people, because it isn’t consciously planned-for behavior. It’s about our subconscious comparing where we are to where we expected to be. Our brain does this in about twenty-year cycles. If we are pretty much where we expected to be, no problem. If there is a disconnect between where we expected to be and where we are, this is the set-up for a mid-life crisis.

 9.      What is our problem with change, then? – As humans, we view changes – even positive changes – in terms of their potential for loss, not gain. We always look at new ventures first in terms of what we have to lose – it’s called loss aversion and we all have it to varying degrees.  Starting a business is risk-loaded, and many people aren’t prepared for what’s required to be an entrepreneur, and incorrectly think that if they are innovators, they can also run the show.  Role confusion is part of anticipating things as they are going to develop because we also exaggerate our own sense of competence around new circumstances.

10.   What’s an example for business?  - When a business moves, or merges, or mounts a major initiative, they may think it’s enough to mandate change.  It rarely is. This is because change is not just a move or merger or new software – it’s a human dynamic, running on human factors, like loss aversion.  Loss of status, loss of a role or even a job, and the one humans really hate-- loss of competence. That’s a function of being out of touch with things (as in the current crisis) because it isn’t clear what the new rules are, or how people relate to each other under those rules.  That’s why change management is such an important discipline, and it goes far beyond the processes or technology of a new operating system.  People need to reexamine an entire range of things to pay closer attention to, re-assess, and re-evaluate.  But they must be able to understand any detail in terms of the big picture, which means new themes and demands.

 11.   This is the reason we are adaptable as a species?  - Yes, and that adaptability has to be more than individual – it must include strategies we can deploy in groups with a changed reward system under new ways of getting things done.   It’s called AQ (Adaptability Quotient), but it goes beyond your abilities or mine to be flexible and take risks for the future.  It requires a skill set that must be internalized, shared, and managed as an effective new thinking style.

 12.    What’s the current big question about change?  We think it is this:  “Can we think about the future while at the same time undergoing unexpected broadband change in the present?”  That’s the current challenge – it’s difficult to think about getting through school, promoting your career, even just doing the work you are used to doing, while at the same time having a vague, but unsettled, speculative idea to imagine what the world is going to be like even a few months away. 

Saturday, September 26, 2020

Life-Time Value and Sudden-Death Sales Syndrome

“Customer centricity can allow your organization to make far more money from your most valuable customers who will buy from you more often and spend more when they do buy from you.”   --Peter Fader, Marketing Professor, Wharton School


Customer Lifetime Value (CLV) is a concept that describes the total worth of a business customer over the life of the relationship.  According to an article in Harvard Business Review (Jan/Feb 2010) CLV is the basis for marketing geared to serving the customer as opposed to selling brands and products. This approach is developing as the core concept for business long-term health and valuation (along with competitive industry equity). 

CLV makes a 180-degree shift: from quarterly profits on sales to focus on long-term customer metrics, limiting spending to acquire new customers by placing a premium on the existing customer.  Customer profitability (CP) measures the past profit; CLV looks forward to the future value that results from active cultivation and deep knowledge. In this scheme, the relationship is lifetime, not short-term, calling for a bird’s-eye view of every transaction as having effects not just in the present but into the far future. 

Case Study: Health Club Memberships.  For nearly 20 years I’ve belonged to the Bellevue Sporting Club, the premier health club in Center City Philadelphia.  It carries a hefty monthly pricetag, which I’m always trying to work around by shopping some less expensive options around town.   But pool and indoor track are hard to find downtown, which are the main club attractions.  When I heard that the pool is now narrowing use to three lanes and requiring timed reservations for swimming, I thought this was my signal to leave—after two decades.  (For the Sporting Club, this represents over $30 K in membership and monthly fees.)  I decided to disenroll.

I entered the sales office and spoke with two young sales agents, explaining that the pool core of value to me now seemed too unwieldy for my schedule.  I was sorry to withdraw my long-term membership, but it looked as if I wouldn’t be getting much pool use (the track would be collateral damage because it could be replaced elsewhere, at least 80%, by a treadmill).  Without missing a beat, the girls cheerfully explained how I could easily quit online (no in-person apologies needed!) and handed me a multi-step instruction card.  Could I just sign something, now that I was here in person? I asked.  Not really.  Perhaps I’d like to go up to the business office, maybe get some help there.  Were they really saying goodbye to a long-time loyal member so easily?  Clearly they wanted to close my case in order to get back to bigger things—like signing up brand-new members. 

In the business office, Bridget proved more helpful. First, she asked what the problem was—something Sales didn’t really seem to care about.  That was easy; the pool.    She pointed out that the lane shrinkage and reservations to swim laps were temporary, imposed only as COVID measures.  At some point, pool life would return to normal.  The freeze I requested when the club closed down in mid-March could be extended to January (I hadn’t even thought to request such an extension).  Here was the Business office more aware and proactive in customer retention than the sales team downstairs.  The three-month grace period allows me more time to re-think leaving and preserves my CLV – all to the club’s benefit.  Why didn’t the gang in Sales do the same—assure me that the pool program was only provisional?  Did Sales even probe to see why I wanted to leave—or care?  Did they do any math, realizing it is five to seven times more costly to recruit a new member than to retain and cultivate those already on the rolls?

A health club is a great example of an experience-based offering that benefits members for life.  The club is just the stage set shell of space and equipment; none of this has any value without the energy supplied by the user.  But blocks like COVID can interrupt lifetime value unless companies appreciate their threat—and appropriate interventions--to the User Experience equation.

These quitting points are known and predictable.  Health clubs are well aware that New Year’s resolutions last about six weeks, then wind down as the expected progress isn’t rewarded in any quick progress toward goals. Far less than half of all members even appear regularly. Currently, for many, the nonstarter is masking up while exercising; for others, suspended showers or even towel service.  Still more just don’t welcome the viral risks of shared water or locker rooms. 

In the Sporting Club case, this customer didn’t want to quit the club—she just wanted someone to discover how to stay enrolled, and keep those payments coming in.  In this case, the Accounting office showed a superior grasp of the long-term benefits of customer retention.  They apparently know where the money comes from.   

Plenty of companies pay lip service to a customer-centric culture, but their behavior shows their ongoing dedication to sales rather than service, and marketing those products versus cultivating their buyers.  Social media has revolutionized interactive (not one-way) communications.  This is a dynamic that deserves a totally revised orientation to the purpose of business—to create value for its customers. This is the root of success for IBM (B2B), American Express, and Nokia (with its Beta Labs in Asia) in understanding and serving customer needs as they evolve by paying close attention to the plentiful interactions that contain plenty of intelligence – when you know how to read them.